In this issue

Look before you leap

The government has promised schools more freedoms through the expansion of the academy programme, but so far details of how it will work have been few and far between. Mike Baker looks at what academy status is likely to mean for schools.

On the day that the new Education Secretary Michael Gove wrote to the headteachers of all 'outstanding' schools urging them to use the fast-track route to academy status, I was with the executive head of a successful federation of primary schools in London.

As Gove's email dropped into his inbox, he was enthusiastic about the opportunity. As leader of a group of three schools, he was confident that the federation was big enough to cope well without local authority support. He also relished the promised freedoms over the curriculum and the school day/week and, above all, the promise of extra money.

I returned to his school the following week. Although he had registered his interest on the Department for Education website - one of over 1,100 schools to do so within the first week or so - he had not yet received a call back from the civil servants. He desperately wanted some answers to a growing number of nagging questions.

The enthusiasm he had showed the previous week was now clouded by concerns about nitty-gritty issues such as VAT payments, the exact level of funding, and land transfer.

He had been told that his federation would have to break up to go through the academy process. Was this true? And what about the school buildings? The London Underground runs beneath the school, who would pay the potentially massive bill if there were subsidence?

As the complexities of academy status sink in, the simplicity of the coalition government's policies look rather less straightforward. Both the academies policy and the 'free schools' idea are rooted in the simple belief that schools are desperate to escape local government control. It is an idea that can be traced back to the grant maintained schools policy and the city technology colleges of the Thatcher government of the late 1980s.

But does it still make sense today to talk about council control of schools? Starting with local management of schools, successive reforms have delivered increased autonomy to schools. Town halls no longer determine how schools spend their money, what or how they teach, or how they are held accountable.

What freedoms

Today, most of the constraints on schools come at the national level, from the National Curriculum, national tests, Ofsted, or legislation on safeguarding. By contrast, local authorities are a pale shadow of their former selves. Their last remaining influence covers the provision of school places, organisation of the school admissions process, and as stretcher-bearers when schools fail.

So what are the essential freedoms that academy status brings? They are relatively few and, if the coalition government delivers on its promises, the differences between mainstream schools and academies will soon be even smaller as all schools are granted greater freedom over the curriculum and over teachers' pay and conditions. So why else would schools want to become academies? The answer is simple: money.

This was also the carrot for most grant maintained schools in Mrs Thatcher's day. A few opt-out pioneers were driven by exasperation with their local councils. But after that, the main motive for opting out was the extra capital and revenue. Inevitably, once large numbers were taking this route, the financial premium started to reduce. And the days of big capital grants are certainly over.

It is impossible to say on a nationwide basis exactly how much extra revenue schools will get by converting to academy status as the level of local authority holdback varies. One LA finance expert estimates the uplift in his area would amount to little more than 2 per cent.

While that is well short of the 10 per cent figure that some have mentioned, even this lower level could be a life-saver if the autumn comprehensive spending review leads to a squeeze on school spending.

Risky business

But becoming an academy just for the money is risky. Going it alone without local authority support would be a big departure for many schools, especially primaries and special schools. Setting up an academy normally requires years of planning and preparation. The new fast-track doesn't require consultation with either the local authority or with parents; if schools rush in, some may spend a long time regretting it.

Meanwhile, if large numbers of schools leave the fold, taking with them their share of the money used for central services, will local authorities still have the capacity to intervene when cracks appear in local school provision? What happens when there is an over-supply of school places? The government says the market will deliver, via the mechanism of parental choice. But what about pupils who remain in the schools that endure a lingering death?

An over-supply of places could easily happen if enough parents and other groups take advantage of the government's other radical idea: the creation of 'free schools'. Imagine the problems it would cause in a local area if a group decides to open a new school yet is not required to consult with the local council. The town hall's long-term plans for school provision would suddenly be chucked back to the drawing board.

And what if other parents in the area preferred the existing school provision? If it were a new local authority school they could oppose it by threatening to kick out elected councillors via the ballot box. But they would have no influence whatsoever on self-appointed group of parents.

Although the free schools policy received most of the attention during the election, it is the academies policy that is likely to have the greater impact. It is feasible that academies will become the mainstream within a few years. However, it seems unlikely that many parents will have the time, stamina, or knowledge to create a school from scratch. There will be a few, mainly in areas where parents are deeply dissatisfied with their local options.

And where parents do go ahead they are likely to have to rely on the growing number of school management companies. Although they cannot be the school's owners, these for-profit operators can run free schools on the sponsors' behalf in return for a fee.

Companies like the Swedish firm Kunskapsskolan, which runs the original Swedish free schools, are already involved in running academies in England.

So the future for free schools is not so much the individual, parent-run school but the chain of privately-managed schools. They will resemble the cut-price independent sector school chains that already exist, but without fees. They may be responsive to parents with children at their school, but they will have no responsibility for ensuring adequate provision across an entire local authority area.

The academies and free schools policies will bring greater market provision to the English school system. Markets can work. They may offer greater choice and sensitivity to customers' needs.

But as economists know there is also something called 'market failure'. It is one thing when a tinned beans manufacturer is forced to close; it is quite another when school provision fails.